JUDGMENT
N.A. Britto, J.
1. These petitions have been filed by the petitioner for the winding up of the respondent M/s. Shri Sahajanand Investment P. Ltd. (“M/s. Sahajanand”, for short) who was the principal borrower and the respondent M/s. C. Pinto Trade Commerce P. Ltd. (“M/s. Pinto Trade Commerce”, for short) who was a guarantor, under the agreement between the parties dated February 17, 2000.
2. The said petitions were filed under Section 433(e) of the Act (Companies Act, 1956) on the ground that the said respondents were indebted to the petitioner in the sum of Rs. 82,36,027 pursuant to the said agreement and also under Section 433(f) on the ground that it is just and equitable that the respondent-companies are wound up as they are running into losses.
3. There is no dispute that the petitioner, both the respondents and one Jose Christovam Pinto, Proprietor of Pinto Real Estate had entered into an agreement dated February 17, 2000. In terms of the said agreement, the petitioner had advanced to M/s. Sahajanand a sum of Rs. 50,00,000 on terms and conditions stated therein. The said sum of Rs. 50,00,000 was advanced to the petitioner by way of cheque dated February 17, 2000, on the condition that respondent M/s. Sahajanand would repay the same to the petitioner on or before February 17, 2001, by demand draft with financing charges at the rate of 2 per cent. per month. M/s. Sahajanand had also agreed to deposit 13 cheques drawn on Punjab National Bank towards interest due at the end of each month and it was further agreed that in case the said cheques were returned unpaid the entire amount of Rs. 50,00,000 along with financing charges due thereon and other costs would be due and payable immediately. It was also stipulated that in case there was failure on the part of M/s. Sahajanand to make the payment of the amount due to the petitioner under the agreement, M/s. Sahajanand were to pay compensation calculated at 4 per cent. per month on the outstanding amount. Respondent-Pinto Trade Commerce and the said Mr. Rui Pinto stood as first guarantor and the second guarantor under the said agreement and jointly and severally agreed, inter alia, that in case M/s. Sahajanand committed any default in fulfilment of his obligations under Clauses 3, 4 and 5 of the said agreement, the petitioner would at his sole discretion be entitled to intimate M/s. Pinto Trade Commerce (first guarantor) or Mr. Rui Pinto (second guarantor) or both about such default and call upon them to pay such amount as it may claim to be due to the petitioner from M/s. Sahajanand (borrower) but not exceeding the amount due by M/s. Rui Pinto Trade Commerce or by Mr. Rui Pinto under the memorandum of understanding dated October 17, 1997, (i.e., Rs. 94,000 plus delivery of 100 sq. meters super built up area to be located on the second floor of the building) and agreement dated December 26, 1998, (i.e., 1,500 upon 2510 sq. meters out of the said undivided property for a consideration of Rs. 3,38,00,000 plus delivery of one premises of 100 sq. meters on the ground floor) and upon such intimation, by the petitioner, M/s. Pinto Trade Commerce or Mr. Rui Pinto (as first guarantor) were bound to make all the payments up to the default payments and further interest and/or compensation which may be mentioned in such intimation due to M/s. Sahajanand on or after that date, directly to the petitioner by drawing the cheques in the name of the petitioner and if such payment made by them in pursuance to the said agreement would be deemed to have been paid to M/s. Sahajanand by M/s. Pinto Trade Commerce or Mr. Rui Pinto. It was agreed that M/s. Pinto Trade Commerce (first guarantor) or Mr. Rui Pinto (second guarantor) would not be entitled to verify the correctness or otherwise by the petitioner or by any objection raised by the borrower in this regard and if M/s. Pinto Trade Commerce or Mr. Rui Pinto failed to pay the aforesaid amount to the petitioner on the due dates, M/s. Pinto Trade Commerce (first guarantor) or Mr. Rui Pinto (second guarantor), as the case may be, shall be liable to pay the petitioners interest at the rate of 4 per cent. per month on the amount so defaulted.
4. There is no dispute that pursuant to the said agreement dated February 17, 2000, M/s. Sahajanand gave six cheques for the amount of Rs. 6,10,000 which when presented by the petitioner for encashment, bounced. The petitioner did launch prosecutions on account of bouncing of the said cheques and it is submitted by learned Counsel Mr. Bodke on behalf of the respondent M/s. Sahajanand that during the trial of the said criminal cases filed by the petitioner for bouncing of the said cheques the said amount of Rs. 6,10,000 was paid.
5. The petitioner, therefore, sent a notice to M/s. Sahajanand being the principal borrower, to M/s. Pinto Trade Commerce being the first guarantor, as well as to Mr. Rui Pinto being the second guarantor calling upon the respondent-companies as well as Mr. Rui Pinto to pay the said sum of Rs. 50,00,000 along with financing charges at 2.2 per cent. per month from February 17, 2000, to February 16, 2001, and further compensation at the rate of 4 per cent. per month from February 17, 2001, till full and final payment of the outstanding amount was made within 15 days failing which proceedings would be taken including filing of a petition before this court. The respondent M/s. Sahajanand replied to the notice dated August 7, 2001, while respondent M/s. Pinto Trade Commerce did not reply to the said notice. In the reply of M/s. Sahajanand the liability towards the petitioner was not specifically denied but what was stated was that the petitioner was aware that M/s. Sahajanand was to receive an amount of Rs. 3,38,00,000 from Mr. Rui Pinto. It was also stated that the petitioner was free to take recourse for specific performance of the agreement as well as take out arbitration proceedings, as contemplated under the said agreement dated February 17, 2000.
6. Since the petitioners’ demand made by notice dated August 7, 2001, was not met the present petitions came to be filed. It appears that during the pendency of these petitions the respondent M/s. Pinto Trade Commerce in Company Petition No. 6-D of 2002 filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, which came to be disposed of by the order of this court dated October 4, 2002, relying on the decision of the apex court in the case of Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. .
7. Thereafter, the parties went for arbitration and before the arbitrator, arrived at a settlement and the disputes between the petitioner and the respondents were settled by award dated December 3, 2003, a copy of which was filed before this court on or about January 5, 2004. In terms of Clause 5 of the said arbitration award the liability of the petitioner of Rs. 50,00,000 due under the said agreement dated February 17, 2000, was met by delivering to the petitioner built up premises of 140 sq. meters on the ground floor and 200 sq. meters on the first floor by respondent M/s. Pinto Trade Commerce and the said Mr. Rui Pinto. Clause 5 of the award further stipulated that both the respondent-companies as well as the said Mr. Rui Pinto would pay to the petitioner an amount of Rs. 85,00,000 in full and final settlement of all the claims and this amount of Rs. 85,00,000 would be paid by respondent M/s. Pinto Trade Commerce and the said Mr. Rui Pinto on behalf of the respondent M/s. Sahajanand as agreed by them vide consent terms dated April 14, 2003, of which Rs. 25,00,000 would be paid by respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto on or before December 20, 2003, along with interest at the rate of 15 per cent. per annum on the said amount from December 14, 2003, until payment and balance amount of Rs. 60,00,000 into equal instalments of Rs. 30,00,000 each, i.e., Rs. 30,00,000 on or before August 15, 2004, along with interest at the rate of 15 per cent. per annum on the said amount of Rs. 60,00,000 from December 14, 2003, till payment. The said interest would be paid along with each of the instalments. In case of default by the respondent M/s. Pinto Trade Commerce or Mr. Rui Pinto to pay the said amount and in case of dishonour of the cheque that may be issued by them for the payment of the said amount, respondent M/s. Sahajanand notwithstanding any remedial action initiated by the petitioner against respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto, should pay same to the extent of the unpaid amounts with 30 days notice by the petitioner.
8. There is no dispute between the parties that the earlier liabilities incurred by the respondents herein along with the said Mr. Rui Pinto were replaced under the award dated December 3, 2003, and were to be met as per the clauses of the said award, particularly Clause 5 thereof, the substance of which has been reproduced hereinabove after the said award was filed before this court on or about January 5, 2004. Since then, the parties have again been seeking time from time to time for settlement of their disputes under the said award.
July 14, 2006:
9. It has been submitted by learned Counsel Mr. Shivan Dessai that in terms of Clause 5 of the award the sum of Rs. 63,50,000, in four instalments were paid to the petitioner. The last instalment was paid on June 29, 2006. It is stated that the said cheques were dishonoured and the petitioner again launched prosecutions against respondent Mr. Rui Pinto and in the course of the said criminal cases Mr. Rui Pinto paid an amount of Rs. 63,50,000 to the petitioner. However, it has been submitted by Mr. M.S. Sonak, learned Counsel on behalf of the petitioner that even if the amount of Rs. 63,50,000 has been paid as stated by Mr. Dessai, it would still mean that in terms of Clause 7 of the award the respondents herein had already committed defaults of Clause 5 of the Award and, therefore, are liable to pay an amount of Rs. 2,43,22,153 as per Clause 7 of the award. It is undisputed that even in terms of Clause 5 still a sum of Rs. 21,50,000 is due and payable to the petitioner if not Rs. 2,43,22,153 as the petitioner claims in terms of Clause 7 of the said award which claim otherwise has got to be prima facie accepted.
10. The first objection taken by Shri Dessai, learned Counsel on behalf of M/s. Pinto Trade Commerce is that the petition against M/s. Pinto Trade Commerce, has got to be dismissed for want of obtaining leave of the court. This submission has been made with reference to Section 439(1)(b) read with Sub-section (8) of the said section and Rule 97 of the Companies (Court) Rules, 1959. Clause (b) of Sub-section (1) of Section 439 of the Act provides that an application to the Tribunal for the winding up of a company shall be by petition presented, inter alia, by any creditor or creditors, including any contingent or prospective creditor or creditors. Sub-section (8) of Section 439 further provides that before a petition for winding up a company presented by a contingent or prospective creditor is admitted, the leave of the Tribunal shall be obtained for the admission of the petition and such leave shall not be granted:
(a) unless, in the opinion of the Tribunal, there is a prima facie case for winding up the company;
(b) until such security for costs has been given as the Tribunal thinks reasonable.
11. Rule 97 of the aforesaid Rules deals with the procedure for filing an application by a contingent or prospective creditor and provides that a petition for winding up a company presented by a contingent or prospective creditor, shall be accompanied by an application under Section 439(8) for the leave of the court for the admission of the petition and no advertisement of the petition shall be made unless the leave has been granted, or, where the leave has been granted subject to any conditions precedent to the admission of the petition, unless such conditions have been satisfied. Shri Dessai has submitted that the petitioner was a contingent creditor and liability of the respondent-company M/s. Pinto Trade Commerce, would arise only in the event, the principal borrower, i.e., M/s. Sahajanand had failed to pay the amount to the petitioner. In support of his submission, Shri Dessai has placed reliance on a Division Bench judgment of the Gujarat High Court in the case of Anil Vasudev Salgaonkar v. Kermeen Foods P. Ltd. [1985] 58 Comp Cas 156. What is observed in this decisions is as follows (page 158):
That the petitioner may ultimately become liable to answer the liabilities of the respondent-company is evident. In that event, the company will become a debtor to the petitioner and that is the reason why the petitioner claims to be contingent creditor. The contingency is that of the principal debtor not discharging his obligations to the creditor. Equally well there is a contingency of the petitioner succeeding in avoiding liability in the event the petitioner is able to show that the subsequent conduct of the creditor has prejudiced the guarantor with the consequence that the guarantee stands discharged. The petitioner may or may not succeed in such a contention and in the event the petitioner does not succeed, the petitioner will necessarily have to answer the respondent’s liability. Under these circumstances, what could be said is that the petitioner’s liability is contingent. As a contingent creditor he can move a petition under Section 439.
12. On the other hand, Shri Sonak, on behalf of the petitioner has referred to Sections 126, 127 and 128 of the Indian Contract Act, 1872, and has submitted that the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract and has placed reliance on the decision of the apex court in the case of State Bank of India v. Indexport Registered , wherein the Supreme Court has held that the guarantor’s liability is co-extensive with that of the principal debtor and the guarantor can be sued without even suing the principal debtor.
13. In my view, the submission of learned advocate Shri Dessai cannot be accepted. There is no doubt that the agreement dated February 17, 2000, between the parties, stipulated that respondent M/s. Sahajanand had agreed to pay the amount of Rs. 50,00,000 to the petitioner in terms of Clauses 2, 3 and 4 of the said agreement and by virtue of Clause 9(c), it was further stipulated that in case M/s. Sahajanand (borrower) committed any default in terms of the said Clauses 3, 4 and 5, M/s. Pinto Trade Commerce (being the first guarantor) and Mr. Rui Pinto (being the second guarantor), would make the payments when called upon them by the petitioner not exceeding the amounts due under the memorandum of understanding dated October 17, 1997, and agreement dated December 26, 1998. The petitioner by virtue of notice dated August 7, 2001, called upon both the respondents to pay jointly and severally the said amount of Rs. 50,00,000 along with financing charges calculated at 2.2 per cent. per month and further compensation at the rate of 4 per cent. per month till the full and final payment of the entire outstanding. The said notice was issued to both the respondents and the said Mr. Rui Pinto, obviously because by then, respondent M/s. Sahajanand, being the principal borrower, had not paid the amount due to the petitioner as stipulated in the said agreement and, therefore, the petitioner was compelled to call upon the respondent M/s. Pinto Trade Commerce, being the first guarantor, to pay the amount due to the petitioner. It is nobody’s case that the petitioner was paid anything at all until the filing of the petition, the amount due to the petitioner under the said agreement. It is therefore obvious that on the date the petition was filed, the petitioner was at liberty to proceed to recover the money due to the petitioner from the respondent M/s. Sahajanand, being the principal borrower as well as from the respondent M/s. Pinto Trade Commerce, being the first guarantor. In other words, the respondents in both the petitions at the time of filing of the petition, had a liability towards the petitioner in praesenti or in other words an existing obligation to pay the sum of money. In other words, the petitioner was entitled to claim its payment presently either from M/s. Sahajanand, being the principal borrower or the respondent M/s. Pinto Trade Commerce, being the first guarantor or both. In other words, there was no contingency which was required to be met, the petitioner having called upon the principal borrower (M/s. Sahajanand) and the first guarantor (M/s. Pinto Trade Commerce) and both having failed to make the payment due to the petitioner under the agreement. In such a situation, it could not be said that the petitioner was a contingent creditor since there was no contingency to be met. Both the respondents have failed to discharge their liability under the agreement in spite of having been called by the petitioner, to make the payment. Viewed in this context, the decision in the case of Anil Vasudev Salgaonkar v. Kermeen Foods P. Ltd. [1985] 58 Comp Cas 156 (Guj), would have no application to the facts of this case.
14. The second objection taken by the learned advocate Shri Dessai on behalf of the respondent M/s Pinto Trade Commerce is that the very fact that the parties had to go for arbitration, shows that the petitioner’s debt was disputed and that being the position, the petition would not be maintainable. In this context, Shri Dessai has placed reliance on the decision in the case of Pradeshiya Industrial and Investment Corporation of U.P. v. North India Petro Chemicals Ltd. , wherein the Supreme Court referred to the case of Madhusudan Gordhandas and Co. v. Madhu Woollen Industries P. Ltd. , and observed that it is well-settled that a winding up petition is not a legitimate means of seeking payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the court. In my view, this submission of learned advocate Shri Dessai, does not deserve to be accepted inasmuch as the decision relied upon by him is of no assistance to the case of the respondent M/s. Pinto Trade Commerce. In fact, M/s. Pinto Trade Commerce did not even care to reply to the notice dated August 7, 2001, sent by the petitioner calling upon both the respondents and the said Mr. Rui Pinto, to pay the said amount of Rs. 50,00,000 with financing charges, compensation, etc. The respondent M/s. Sahajanand although replied to the notice, did not in specific terms deny the liability towards the petitioner. As rightly pointed out on behalf of the petitioner, the trust of the defence of each of the respondents is that the petitioner should proceed against the other without a specific denial of their liability towards the petitioner. In any event, it must be stated that in terms of the said agreement dated February 17, 2000, the respondent M/s. Sahajanand had agreed to pay the amount received by him and so also the respondent M/s. Pinto Trade Commerce when called upon by the petitioner in case of default made by M/s. Sahajanand. If at all the parties went for further arbitration which culminated into an award dated December 3, 2003, it was due to the differences between the respondent inter se and the said Mr. Rui Pinto. The said award was made after the parties filed consent terms dated November 14, 2003. There was no dispute at all as regards the liability of the respondents towards the petitioner in terms of the first agreement dated February 17, 2000, and therefore, the second contention of the learned advocate Shri Dessai, has got to be rejected.
15. The third objection which is taken in common on behalf of both the respondents is that the respondents were required to give fresh notice in terms of Section 434 of the Act, since under the said award, the cause of action had changed as well as the liabilities inter se amongst respondents had also changed. As per the respondent M/s. Sahajanand, the respondent M/s. Sahajanand was liable to pay only in case of default by the first guarantor and the second guarantors. Both the parties have placed reliance on several judgments on the point of notice. One set of judgments holds the view that a creditor is entitled to prove indebtedness independently of the notice and the notice would be required to be given only if the creditor wants to take the benefit of the deeming provision of Section 434(1)(a) of the Act. For example:
A proper demand made in accordance with the provisions of Section 434(1)(a) only gives benefit of the presumption that arises under it, but if the demand is found to be invalid for any reason, then it is still open to the petitioner to fall back upon Section 434(1)(c).” (Tripura Administration v. Tripura State Bank Ltd. AIR 1959 Tripura 41, 42).
The demand in such notice is for winding up the company on the basis that the company is to be deemed to be unable to pay its debts when such debts are not secured or compounded to the satisfaction of the creditor within the statutory period. The creditor, apart from notice, which even it is treated non-existant was entitled to prove by other evidence that the company is unable to pay its debts…will only prevent the petitioner from getting the benefit of presumption as to the company’s inability to pay its debts but the petitioner may prove such inability as a fact aliunde (Pandam Tea Co. Ltd. v. Darjeeling Commercial Co. Ltd. [1977] 47 Comp Cas 15, 18 (Cal)).
A proper demand made in accordance with Section 434(1)(a) only gives the benefit of the presumption that arises under it; but if the demand relied upon is found to be invalid for any reason, it is still open to the petitioner/creditor to fall back upon Section 434(1)(c) and prove that the company cannot pay its debts (Paramjit Lal Badhwar v. Prem Spinning and Weaving Mills Co. Ltd. [1986] 60 Comp Cas 420 (All)).
Thus, it appears that even in the absence of notice under Section 434(1)(a) of the Act, if the petitioner proves to the satisfaction of the court that the company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company. If the case under Section 434(1)(a) is not proved, he can prove his case under Section 434(1)(c) and only because the notice was not validly served, the application for winding up cannot be thrown out but the petitioner has proved the indebtedness of the company as also its failure/or negligence to pay the debt in question (Ramdas and Co. v. Kitti Steels Ltd. [2001] 103 Comp Cas 199 (AP)).
For the purpose of relying upon the deemed inability of the company, the creditor had to strictly comply with the requirement of sending the notice of demand in terms of Section 434(1)(a) and if the said section is not been complied with, the rule of presumption of inability to pay the debts against the company, would not be invoked. At the same time, even without invoking the deemed inability of the company to pay its debts, a creditor can seek for winding up of the company under Section 434(1)(a) of the Act on the ground that the company is unable to pay its debts (Rajearajeswari Packaging Products v. Dev Fasteners Ltd. [2002] 108 Comp Cas 715 (Mad)).
Section 434 envisages that when a notice is served under that section in a manner described and if the payment is not made within a period of three weeks, it may be presumed that the company is unable to pay its debt. This only gives a presumption that the company is unable to pay its debts.
16. On the other hand, Shri Dessai has submitted that giving of a notice is mandatory and on failure to give such notice, a petition is not maintainable. In support of the said submission, Shri Dessai, has placed reliance on two decisions of this court in the case of Vysya Bank Ltd. v. Randhir Steel and Alloys P. Ltd. [1993] 76 Comp Cas 224 and Kold-Hold Industries P. Ltd. v. Arabian Exports Ltd. [2004] 119 Comp Cas 1 (Bom), and that of the Madras High Court in the case of Rajearajeswari Packaging Products v. Dev Fasteners Ltd. [2002] 108 Comp Cas 715. In the case of Kold-Hold Industries P. Ltd. v. Arabian Exports Ltd. [2004] 119 Comp Cas 1 (Bom), a reference was made to the case of N.L. Mehta Cinema Enterprises P. Ltd. v. Pravinchandra P. Mehta [1991] 70 Comp Cas 31 (Bom), wherein a Division Bench of this court had observed thus (page 37):
The requirement contained in Section 434, has to be strictly complied with in order to raise the legal fiction. It was certainly open to the petitioner to make an alterative claim, viz., that the company is not only deemed to be unable to pay its debts, but that, in fact, also it is unable to pay its debts. For the latter allegation, however, sufficient particulars must be given in the petition for winding up. These are not found in the present petition and, in our view, the petitioner has rested his case only on the deemed fiction under Section 434. As, in our opinion, the said fiction was not available to the petitioner since he did not address the notice of demand to the registered office of the company, the petition is liable to be dismissed.
17. It is really not necessary for me to express any view one way or the other whether a petition could be filed without giving a notice. It does prima facie appear that the later decisions of this court relied upon by learned Counsel Shri Dessai, have not taken into consideration the view expressed by the Division Bench of this court. As far as the case at hand is concerned, notice was given to both the respondents and it is only one of the respondents who chose to reply to the same and the other respondent ignored it, as stated hereinabove. It was certainly not expected of the petitioner to have given a fresh notice, even if required to be given, after the award was filed. This would mean that the petitioners would have to withdraw the petitions, give a notice and then come back to the court with fresh petitions. In my view, the said award can be taken as a subsequent event taken place between the parties and these petitions now will have got to be decided on the basis of the indebtedness of the respondents, who are the petitioners, based on the said award. The courts can and in many cases, do take cognisance of event and development taken place subsequent to the institution of proceedings for making the right or remedy claimed by a party just and meaningful and so as to be legally and factually in accord with the current realities. Although the petitions were filed based on the agreement dated February 17, 2000, the said agreement has now given way to the award made by the consent of the parties and the indebtedness towards the petitioners by the respondents has now got to be considered in the light of the said award and that takes us to the last submission of Shri Bodke, learned Counsel on behalf of the respondent M/s. Sahajanand.
18. Shri Bodke has submitted that in terms of the said award, respondent M/s. Sahajanand was entitled to a notice which has not been given and in the absence of such a notice, the petition would not be maintainable as against the respondent M/s. Sahajanand. Indeed, Clause 5 of the award provides that:
notwithstanding any remedial action initiated by the claimant (petitioner) against respondents Nos. 2 and 3, M/s. Pinto Trade Commerce and Mr. Rui Pinto, shall pay the same to the extent of the unpaid amounts within 30 days notice by the claimant (petitioner).
19. Shri Bodke has placed reliance on Registrar of Companies v. Kavita Benefit P. Ltd. [1978] 48 Comp Cas 231 (Guj). It is observed in this case that a sum payable upon a contingency is not a debt or does not become a debt until the contingency has happened. Shri Bodke, therefore, submits that since no notice of 30 days has been given by the petitioner to M/s. Sahajanand, no sum is recoverable from the respondent Sahajanand. In this context, Shri Sonak has brought to my notice letter dated December 29, 2003, which was issued to Mr. Rui Pinto, proprietor of M/s. Pinto Real Estate, with copies to M/s. Sahajanand and M/s. Pinto Trade Commerce, by which the said Mr. Rui Pinto, was called upon to pay the amount of Rs. 25,00,000 within 15 days, failing which, proceedings for dishonour of cheques would be initiated and M/s. Pinto Trade Commerce was also informed to pay to the petitioner the said amount with interest. My attention is also drawn to the letter dated December 29, 2003, addressed by the petitioner to the respondent M/s. Pinto Trade Commerce, by which the respondent Pinto Trade Commerce were called upon to pay the said sum of Rs. 25,00,000 along with interest, etc., a copy of which, was marked to the respondent M/s. Sahajanand. It is submitted on behalf of the petitioner that by virtue of the said two communications, the petitioner had adequate notice that Mr. Rui Pinto, proprietor of M/s. Pinto Real Estate, as well as the respondent M/s. Pinto Trade Commerce, had not cleared the dues of the petitioner and in any event, it is submitted that it would be hyper technical view to say that the respondent M/s. Sahajanand had no notice that the respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto, proprietor of M/s. Pinto Real Estate, had defaulted in making the payment as contemplated by Clause 5 of the said award. Apart from the said two notices dated December 29, 2003, addressed to Mr. Rui Pinto, proprietor of M/s. Pinto Real Estate and to respondent M/s. Pinto Trade Commerce, calling upon them to pay the amount of Rs. 25,00,000 due on the cheque issued, the proceedings before this court have been adjourned from time to time with a view to settle the matter between the parties. The award is dated December 3, 2003, and since then, the proceedings had been adjourned from time to time and it is difficult to believe that respondent M/s. Sahajanand, till date, does not know that respondent M/s. Pinto Trade Commerce or for that matter Mr. Rui Pinto, have not complied with Clause 5 of the award. The word “notice” cannot be defined correctly and fully and it means and includes information, intimation, knowledge, etc. In the course of settlement proceedings, the respondent M/s. Sahajanand must have certainly come to know that respondent M/s. Pinto Trade Commerce or for that matter, Mr. Rui Pinto, had not paid the amount due by them in terms of Clause 5 of the said award. After all, the amount of Rs. 85,000, was to be paid by respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto, on behalf of respondent M/s. Sahajanand. True, the petitioner was required to give 30 days notice in the event the respondent M/s. Pinto Trade Commerce and Mr. Rui Pinto had not paid the said amount as stipulated in Clause 5 of the award and since the said amounts were to be paid on behalf of respondent Sahajanand, respondent Sahajanand ought to have found out after the receipt of the copies of the said two notices whether respondent M/s. Pinto Trade Commerce as well as Mr. Rui Pinto, had discharged their liability, which they were required to discharge on their behalf as well and considering the aforesaid facts, it cannot be said that the petition cannot proceed against respondent M/s. Sahajanand only because a formal 30 days notice was not given by the petitioner to the respondent M/s. Sahajanand. It is certainly not the case of respondent M/s. Sahajanand, that respondent M/s. Pinto Trade Commerce or for that matter, Mr. Rui Pinto have satisfied the liability of the petitioner in terms of Clause 5 of the award or for that matter, on their failure, he has satisfied the same more so when it was required to be satisfied by both the respondents as well as the said Mr. Rui Pinto. Since Rs. 20,00,000 were paid only on June 29, 2006, which is not in accordance with Clause 5 of the award, both the respondents along with the said Rui Pinto, are now prima facie, liable to pay to the petitioner, a sum of Rs. 2,43,22,153 with interest as stipulated in Clause 7 of the said award, which liability both the respondents have admittedly failed to discharge towards the petitioner. Prima facie, therefore, both the respondents are indebted to the petitioner, jointly and severally in the sum of Rs. 2,43,22,153, with interest as per Clause 7 of the award. Ground of Section 433(f) of the Act can be considered at the time of final disposal of the petitions.
20. In the light of the above, that the order admitting the petition and ordering the petition to be advertised, with interim relief, that came to be made on the last date of the hearing 0uly 7, 2006).